By Felipe Barragán, Expert Research Strategist at Pepperstone
October 8, 2025 –
“The Mexican Peso could remain under pressure against the US dollar, pressured by weak data from the country’s vital automotive sector. However, the currency remained within a tight consolidation range as investors await Thursday’s inflation report for further policy cues.
Mexico’s auto production dropped 6.1% year-on-year in September, marking a sharp contraction that dragged the January-to-September cumulative figure to a marginal 0.3% decline. Exports also edged 0.3% lower in the same period. Given the sector’s importance for employment, industrial output, and trade, the weak figures added downside pressure to the peso after yesterday’s decline in consumer confidence.
In parallel, concerns over the upcoming 2026 USMCA review are resurfacing. Industry officials warn that stricter rules of origin and potential restrictions on Asian auto parts could strain North American supply chains and impact production quality. The sector already relies heavily on non-regional components, and any shift in policy may pose challenges for automakers operating in Mexico.
Looking ahead, investors are turning their attention to Mexico’s mid-month inflation data due Thursday. A print in line with expectations (0.27%) could prompt markets to expect Banxico to hold rates steady in November. This outcome may offer near-term support to the peso.”